IESO Creates and Promotes Hybrid Electricity Generation-What could go wrong?

IESO Creates and Promotes Hybrid Electricity Generation-What could go wrong?

Who knew?

IESO recently claimed by simply combining very old technology mankind would create hybrid electricity generation! 

The foregoing was stated recently by IESO in their September report “Enabling Foundational Hybrid Facility Models in the IESO-Administered Markets ”.  One example cited by IESO in the 46 page report, says combining batteries (invented in 1800 by Italian physicist Alessandro Volta) with electricity generated by wind turbines (created by Professor James Blyth in 1887) is “hybrid” generation.  The following from the report states: “Expiring wind and solar contracts along with declining technology costs for battery storage is expected to drive hybrid facility development over the next decade.”

It appears to be similar to mating horses and donkeys to create mules.  Considering how long batteries and wind generated electricity have been around perhaps IESO should name this new “hybrid” they claim now exists in Ontario?  The words “double-dealing” and or “chicanery” added to wind/battery or solar/battery would be a good descriptive for these hybrids!   

The foregoing implies IWT (industrial wind turbines) and solar with FIT (feed in tariff) contacts brought to us in Ontario by the McGuinty/Wynne governments will be renewed as long as battery storage is added by the owners. One should wonder if the Ontario Minister of Energy, Todd Smith has been played by Mark Carney, Vice Chair of Brookfield? A Brookfield subsidiary recently proposed a $300 million 161 MW (megawatts) battery storage unit that will reputedly contain four hours (644 MWh) of dispatchable energy and those batteries will be charged in the middle of the night and dispatched during the day when demand is high.  The benefit to Brookfield will translate to selling the power when the HOEP (hourly Ontario energy prices) market price is high while downloading it when prices are low. 

What looks to be somewhat confusing about this “hybrid” issue is the Energy Minister’s letter of August 23, 2022 wherein he states:  “I am pleased to see that through the first Medium-Term RFP (MT1 RFP) our government’s approach of competitive procurements has secured supply at a cost about 30 per cent lower than previous contracts.” It one believes he was referencing IWT contracts which are paid $135/MWh that would reduce the price for grid accepted wind to $94.50/MWh without including what we are also paying for “curtailed” generation of $120/MWh! 

Interestingly enough it appears the “30 per cent lower” quote from the Ministry letter is related to comments in the 46 page September 2022 report from IESO titled:  “Enabling Foundational Hybrid Facility Models in the IESO-Administered Markets”! The IESO report has the following two sentences: “Post-market renewal, there will be a locational marginal price (LMP) for the storage injecting resource and another LMP for the storage withdrawing resource. The LMP values may be different for the two (2) resources (e.g., $20/MW for the storage withdrawing resource and $21/MW for the storage injecting resource).”

The question becomes; had IESO negotiated the additional payment(s) with the IWT owners and made the Minister aware of the agreement reached before he penned his letter as it infers; due to the date of his letter proceeding the IESO report by one month?

Despite the foregoing question it seems interesting that the two additional payments added to the 30% reduction would bring the total cost of wind generation to $135.50 ($94.50+$20.00+21.00=$135.50).  The other question is whether the IWT owners can pick and choose when to sell their stored energy and if they will be allowed to choose hours when the HOEP market price is higher than the guaranteed price?

Another very recent announcement from Capital Power in Windsor suggests Ontario’s natural gas fired plants are keen to get in on the “battery” storage action as the September 21, 2022 article in the CBC suggests.  Capital Power is proposing to add a 40 MW battery storage unit particularly as IESO has forecast “demand in southwestern Ontario as a whole is expected to double over five years to about 2,000 megawatts”.  The article highlights a report from Power Advisory which amusingly recommends the City of Windsor ironically investigate “importing power from Michigan” whom the EIA (US Energy Information System) note in 2021 got their largest share (32%) of electricity from coal generation.

One of the principal reasons for the IESO projected demand increase is; “the announcement of the $4.9-billion Stellantis-LG Energy Solution electric vehicle battery plant, a massive facility slated to open in 2024.” The press releases from the Provincial and the Federal Governments don’t disclose how much taxpayers will be providing as the Federal Press Release notes: “Details of this agreement are subject to commercial confidentiality and cannot be disclosed at this time”.  Needless to say we taxpayers should expect government grants will be several hundred million of our tax dollars! Both press releases tout the wonders of converting from manufacturing ICE to EV automobiles in line with PM Trudeau and his minions seeking to achieve his target of “100% zero-emission vehicle (ZEV) sales by 2035”. The only announcement about grants was from the City of Windsor who have committed $68 million with the help of a $45 million loan from Infrastructure Ontario an Ontario taxpayer owned entity.

As IESO and the Federal, Provincial and Municipal governments here in Canada continue the push for batteries to be manufactured in Ontario and to also provide electricity it is interesting to note California has similar targets as those proposed by our various government bodies. Very recently PG&E (Pacific Gas & Electric) experienced yet another major battery fire at a large battery storage unit (182.5 MW) and that plant has now been shut down indefinitely!  

From the above summary of ongoing events here in Ontario and elsewhere it seems, in the minds of our bureaucrats and politicians charged with running our energy system (whose objectives should be reliable power), their view is:

“everything old is new again”!

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